Pennymac is raising its conforming loan limits, effective immediately, ahead of the Federal Housing Finance Agency’s official announcement in November.
The increase of nearly $13,000 for single units comes a day after United Wholesale Mortgage hiked its conforming limits, becoming the first major lender to do so in this market cycle.
“By getting ahead of the curve, we are enabling our partners to offer additional options to grow their business in a dynamic market,” said Abbie Tidmore, chief revenue officer at Pennymac.
Companies like Pennymac, UWM, Rocket, Rate and CrossCountry, have looked to get ahead of the official announcement in years past by estimating what the FHFA’s house price index for the third quarter will be. That index, which is based on a formula established by the Housing and Economic Recovery Act, typically sets the pace for limit increases with some exceptions.
Although Pennymac and other lenders start accepting loans at these higher limits, they will need to keep the mortgages on their balance sheets until Jan. 1, when the FHFA’s yet-to-be-announced limits go into effect.
Companies that raise their conforming limits before the agency that oversees two influential government-sponsored mortgage buyers officially acts risk potentially ending up in a situation where loan limits depart from the anticipated formula.
Pennymac’s new conforming mortgage limits are:
- $819,000 one-unit conventional (increased from $806,500)
- $1,048,500 two-unit conventional loans (increased from $1,032,650)
- $1,268,000 three-unit conventional loans (increased from $1,248,150)
- $1,575,000 four-unit conventional loans (increased from $1,551,250)
Pennymac’s updated limits match UWM’s in all four channels.
FHFA’s current director, Bill Pulte, has rebranded it U.S. Federal Housing.
